Property, Plant and Equipment Accounting Policy

Property and equipment are initially recorded at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are expensed as incurred. The following table summarizes Walmart’s estimated useful lives that are generally used to depreciate the assets on a straight-line basis:

Estimated Useful Lives

Land

N/A

Buildings and improvements

3-40 years

Fixtures and equipment

1-30 years

Transportation equipment

3-15 years

Construction in progress

N/A

Leasehold improvements are depreciated or amortized over the shorter of the estimated useful life of the asset or the remaining expected lease term. Total depreciation and amortization expense for property and equipment, property under financing obligations, property under capital leases and intangible assets for fiscal 2019, 2018 and 2017 was $10.7 billion, $10.5 billion and $10.1 billion, respectively.

Property and equipment, including property under capital lease and financing obligations, gross

Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.

Walmart Inc.’s property and equipment, including property under capital lease and financing obligations, gross increased from 2017 to 2018 and from 2018 to 2019.

Property and equipment, including property under capital lease and financing obligations, net

Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.

Walmart Inc.’s property and equipment, including property under capital lease and financing obligations, net increased from 2017 to 2018 but then declined significantly from 2018 to 2019.

As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.

Walmart Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

Estimated total useful life

Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.

Walmart Inc.’s estimated total useful life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019.

Estimated time elapsed since purchase

The approximate age in years of a company’s fixed assets. Useful for comparison purposes.

Walmart Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

Estimated remaining life

Walmart Inc.’s estimated remaining life of depreciable property, plant and equipment declined from 2017 to 2018 and from 2018 to 2019.

Average Age

Jan 31, 2019

Jan 31, 2018

Jan 31, 2017

Jan 31, 2016

Jan 31, 2015

Jan 31, 2014

Selected Financial Data (USD $ in millions)

Accumulated depreciation and amortization

Property and equipment, including property under capital lease and financing obligations, gross

As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.

Walmart Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

Estimated Total Useful Life

Jan 31, 2019

Jan 31, 2018

Jan 31, 2017

Jan 31, 2016

Jan 31, 2015

Jan 31, 2014

Selected Financial Data (USD $ in millions)

Property and equipment, including property under capital lease and financing obligations, gross

Land

Depreciation and amortization expense for property and equipment, property under financing obligations and property under capital leases